Industry participant and Head research and Corporate Travel, Zenith Travel, Olumide Ohunayo, has asked the federal government to address certain constraints and investigate domestic carriers before any palliative is given.

This is just as he stated that bailout should not include charter, private and special service operators as they have abused past palliatives under the aegis of Airline Operators of Nigeria (AON).

In a paper to our correspondent on the issue of bailout and the constraints that need to be addressed, Ohunayo called on government to look at the management of the airlines asking for bailout and their books stating that the country needs to check on people who come into the country's airline industry and leave it in a mess.

He made an example with the new staff of Arik Air, Messrs Kevin Dudley, Jason Holt and John Roijen who were the Chief Operating Officer, Director of Flight Operations and Chief Financial Officer respectively of Virgin Nigeria when the airline leased five B737 aircraft at an astronomical rate of $181,000 per aircrafts which was 80 per cent higher than the going market rate.

He also said that they were instrumental in owing fuel marketers N30m when they launched a new uniform for N90m.

Ohunayo also said that the trio assisted the Virgin Group to quickly re-coup the $25m initial investment while pushing the airline (Virgin Nigeria) into a huge debt that haunts it till date.

He said," These men have been recruited by another Nigerian carrier to continue the debt ridden policy. Nobody is talking; I will not be surprised to see the last of the quartet Mr. Clifford Conrad returning as Managing Director of another Nigerian carrier as the industry has confirmed it is bereft of competent airline administrators. "

"It is a big oversight not to have any representative of the legislative arm of government in the Committee as they will approve the necessary funds, draft the necessary protective act the time needed to draft and complete a rigorous legislative process."

Another issue raised over the bailout was Nigeria's risk and credit rating which lessors in attendance of the just concluded African Finance Conference in Abuja did not hide their hesitation to do business with Nigeria airlines.

Ohunayo said, "They did not hide their feelings as they easily referred to the ugly Banex Airline saga that earned us the unenviable status of a defaulting nation. Other issues are the nation's prolonged legal process, cap on fares, unfavorable bilateral agreements, non availability of insurance cover by government owned service providers, taxes, airspace and airport infrastructure and the ability to deregister the aircraft quickly. Surprisingly, they were not swayed by the domestication of the Cape Town Convention and the democratic governance in place."

On the type of bailout expected, Ohunayo said," The airline industry has different types of bailout, which can be generally categorized into financial, market or fuel bailout. In the US, the government has a market bailout enshrined by law, with the Fly America Act while big network airlines benefit from huge financial bailout considering the economic implication of allowing such airlines to go down."

"In Europe Sweden, England, Spain, Italy and France all have market bailout by executive fiat, because membership of European Union makes it difficult to enact it in their respective constitutions. The patronage of domiciled or European registered carriers is encouraged when public funds are used, even for deportees."

"There is also an Essential Air Service programme (EAS) in Europe that stimulates travel to remote or unviable airports and is subsidized by the different governments for scheduled regional operators. Early this year, the French government loaned some French banks 5 billion Euros to stimulate financing of Airbus aircraft claiming they are not directly subsidizing Airbus."

"In Asia, China and India encouraged, supervised and implemented the consolidation process when deregulation produced two or three aircraft airlines. They went further to remove taxes/surcharges on aviation fuel, thereby reducing operation costs. Also, fuel from China's reserve was given to airlines when the crunch was biting hard. Recently, the governments of India and Japan approved huge financial bailout for troubled Air India and JAL respectively considering their size and general economic implications."

"The Brazilian government reduced the tax on fuel and ensured Varig did not go into liquidation by supervising its auction bailout, merger and eventual acquisition by Gol Airlines while the Argentine government re-nationalized the floundering flag carrier to save it from going down."

"In Africa, the Egyptians set up a Civil Aviation Fund that supports critical sectors of the industry, the latest being an aircraft leasing company that will offer their local carriers aircraft at highly competitive rates.

"The government of South Africa has done everything possible to keep South African Airways (SAA) afloat using all forms of assistance, while the story is the other way round with the only profitable carrier in Africa, Ethiopian airlines adding value to the government purse."

"In Nigeria, we liquidated our national carrier instead of giving a life-line and wobbled and fumbled in an attempt to start another carrier. Fortunately, private carriers came to our rescue, but they are now being deliberately or naturally orphaned by government actions and policies which are tilted towards multiple designation and entry for foreign carriers."

"Some state governments are developing airports, while others are funding federal airports in their domain in a bid to save them from near collapse and have promoted flights to some of these airports by buying seats on some domestic carriers. States such as Ondo, Kwara, Cross River and Katsina have cloned the PSO and EAS service which is being practiced in developed countries. "